Former special counsel appears at second warrant review

Former special counsel Park Young-soo appeared at a warrant review hearing held at the Seoul Central District Court on Thursday morning to determine whether he should be arrested over corruption allegations tied to a high-profile development scandal.

Former special counsel Park Young-soo heads to his warrant review hearing at the Seoul Central District Court on Thursday morning. The court rejected prosecutors' previous request for an arrest warrant against Park in late June. [YONHAP]

Former special counsel Park Young-soo appeared at a warrant review hearing held at the Seoul Central District Court on Thursday morning to determine whether he should be arrested over corruption allegations tied to a prominent land development scandal.

Park rose to prominence after being appointed as the special counsel leading the investigation into the corruption case involving former President Park Geun-hye in 2017.

The former special counsel, who formerly served as the chair of Woori Bank's board of directors, is suspected of receiving 800 million won ($611,000) in bribes from private developers in return for lending Woori Bank's support to the Daejang-dong development in 2014.

Prosecutors believe that 300 million won was delivered to Park while he was running for chairman of the Korean Bar Association in 2015, and that the rest was given to him in a separate payout the same year in return for Woori Bank issuing a letter of intent to extend a loan in favor of small asset management company Hwacheon Daeyu.

The company is at the center of the development corruption scandal surrounding the Daejang-dong project in Seongnam, Gyeonggi, just south of Seoul.

Despite only having 50 million won in capital and no prior record of participating in real estate developments, the company was able to join the 1.5 trillion-won Daejang-dong development launched by the Seongnam city government through a joint public-private consortium led by KEB-Hana Bank.

Hwacheon Daeyu invested only 350 million won in the project and raked in 400 billion won in profit from the development, while the Seongnam Development Corporation, which is owned by the city government, earned only 183 billion won from its 25-billion-won investment in the project.

Hwacheon Daeyu also made 300 billion won in apartment sales from the development, while its Cheonhwa Dongin affiliates reaped an additional 400 billion won in profits.

The scandal over Hwacheon Daeyu's involvement in the Daejang-dong development has attracted attention because it launched during Democratic Party leader Lee Jae-myung's tenure as the mayor of Seongnam, Gyeonggi, where the development is located.

Prosecutors believe that former special counsel Park is one of several individuals in the so-called "5 billion won" club of people who were each promised 5 billion won by asset management company Hwacheon Daeyu.

One of the new charges against Park in the prosecution's second arrest warrant is that he accepted 1.1 billion won in short-term loans from Hwacheon Daeyu to his daughter between 2019 and 2021.

Other figures who were allegedly promised 5 billion won by the company include former People Power Party lawmaker Kwak Sang-do and former Prosecutor General Kim Soo-nam.

Park previously appeared before the Seoul Central District Court in June, when prosecutors requested their first arrest warrant against him. That warrant was rejected by the court, which determined that there was "room for dispute" regarding the evidence related to the bribery allegations, noting that an arrest at that point can infringe on his "right to defense."

The court is expected to issue a decision on the latest arrest warrant application by Thursday night.

BY MICHAEL LEE [lee.junhyuk@joongang.co.kr]